Tomorrow's Knowledge Workers: The Evolving Workforce and the Challenge to US Businesses

Slide 1: Tomorrow’s Knowledge Workers: The Evolving Workforce and the Challenge to US Businesses PARC Futures Workshop Ken Parekh and Mary Walker Management Consultants with the Deloitte Mass Career CustomizationTM Initiative April 30, 2008

Slide 2: Which workers are we talking about? “A person who works primarily with information or who develops and uses knowledge in the workplace” (from Wikipedia) Related labels: professional-managerial mass upper middle class web workers skilled workers symbolic analysts creative class “Related labels” from: Robert Reich; Richard Florida; and the Brookings Institute working paper The Decline of the White Working Class and the Rise of a Mass Upper Middle Class (April 2008).

Slide 3: One Page Summary 1.There won’t be enough of them. on the future of knowledge workers 2.Their expectations will be different. 3.Technologies will transform when, where and how work is done.

Slide 4: Converging key trends are dramatically changing the US talent marketplace Shrinking Pool of Skilled By 2012, there will be a 6 million person gap between the 1 Labor supply and demand of knowledge workers in the U.S. Only 17% of households now have a husband in the 2 Changing Family Structures workforce and a wife who is not, down from 63% in past generations. Nearly 60% of bachelor’s and master’s degrees in the U.S. 3 Increasing Number of Women are awarded to women. Changing Expectations of 84% of male executives agree they would like to realize 4 Men professional aspirations while having more personal time. Baby boomers are almost twice as likely as Gen X/Y to be Evolving Expectations of Gen work-centric, with only 13% of Gen X/Y being work-centric. 5 X and Gen Y The remaining 87% of Gen X/Y are family-centric or dual- centric. Increasing Impact of 76% of households now have broadband connectivity while 6 Technology mobile phones, messaging and email has become pervasive. Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 5: And these trends are global, not just US Shrinking Pool of Skilled In 2006, 40% of companies worldwide reported difficulty filling 1 Labor jobs. 60% of households in Australia and Hong Kong have female 2 Changing Family Structures heads of households. Since the 1980s, China and the UK have had double-digit 3 Increasing Number of Women increases in the percentage of women in the finance, legal, and medical professions. Changing Expectations of Men in Western Europe are more likely than women (20% vs.. 4 Men 8%) to feel limited by the need to sacrifice everything for work. In Latin America and SE Asia, many employers have Evolving Expectations of Gen 5 X and Gen Y implemented programs to enhance work-life balance and encourage social responsibility. In the EU27, 54% of households had access to the internet Increasing Impact of 6 Technology during the first quarter of 2007 and 42% had a broadband connection. Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 6: 1 Shrinking pool of skilled labor  By 2025, the working age population is expected to drop by 14 percent in Japan and by 7% in Germany  76 million Baby Boomers in the U.S. will begin to reach retirement age  Domestic US labor force will only grow at rate of 1%  Low birth rates in many countries  Increased competition for skilled workers globally  Stagnant college graduation rates in US  Decline in competency in basic skills among US high school and even college graduates Source: Employment Policy Foundation Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 7: 1 Increasing gap between number of jobs and number of workers By 2012, there will be a 6 million person gap between the supply and demand of knowledge workers in the U.S. Numeric Change in Labor Force by Age, Projected 2004 - 2014 (in Thousands) 7,616 4,548 3,689 1,769 -110 -2,815 25-34 45-54 55-64 15-24 65+ 35-44 Source: U.S. Bureau of Labor Statistics, Labor Force, Occupational Outlook Quarterly 49, no. 4 (Washington, DC: GPO, Winter 2005/2006). Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 8: 2 Changing family structures affecting roles Only 17% of households now have a husband in the workforce and a wife who is not, down from 63% in 1950. Changing Family Structure 1950-2005 1.8% 3.5% 5.0% Male Single 10.8% 12.8% Parents 20.4% Female 24.2% Single Parents Other 63.4% 40.6% Families Dual-worker 17.4% Families 1950 2005 Traditional Families Source: 1. Catalyst, Two Careers, One Marriage: Making it Work in the Workplace (New York: Catalyst, 1998) With updated data for 2005 from U.S. Bureau of Labor Statistics, Annual Social and Economic Supplement, Current Population Survey Washington, DC: GPO, 2005). Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 9: 3 Increasing number of women in paid work The proportion of degrees awarded to women vs.. men in the US has risen sharply since the 1970s. % Share of Professionals Degrees Awarded To Women Veterinary 70 Pharmacy 60 50 50% Law In 2007, women Medical MBA comprise: 40 Dentistry  58% of college 30 students 20  51% of new entrants 10 to workforce 0  48% of workforce 1950 1960 1970 1980 1990 2000 Source: W. Michael Cox & Richard Alms, “Scientists Are Made, Not Born” New York Times, 28 Feb, 2005; US Department of Education; US Department of Labor Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 10: 4 Changing expectations of men towards work Men today are less likely to sacrifice family and personal time for work. Male Executives Who Want to Realize Professional Aspirations While Having More Personal Time Strongly Disagree Somewhat Disagree 4% 12% Strongly Agree 48% Somewhat Agree 36% Source: Jody Miller, “Get a Life!” Fortune, 28 November, 2005; Catalyst, Women and Men in US Corporate Leadership: Same Workplace, Different Realities, (New York: Catalyst 2004) Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 11: 5 Evolving expectations Generations X and Y around work / life “We recognize that changes in work structures come with an economic cost, and we are willing to be paid less in exchange for a better working life.” Stanford Law students Andrew Canter and Craig Segall Members of Generation Y are more family-centric than Baby Boomers Baby Boomers (38-57) Generation Y (under 23) 22% 13% 41% 50% 37% 37% Work-Centric Family-Centric Dual-Centric Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 12: 5 Gen Y’s expectations of the workplace  Want transferable skills that support job mobility  Expect to have many jobs over their lifetimes  High value placed on engagement and attention from companies, bosses, mentors  Broad attention span and multitasking  Communicate via multiple channels  High use of computer games, have developed job-related skills via gaming  Willing to trade off between income and job demands  Less willing to unquestioningly adhere to “traditional” norms around the workplace From various sources, including Carolyn Martin’s and Bruce Tulgan’s work on Generation Y in the workplace.

Slide 13: 5 Gen Y teens and technology: Creating, contributing, communicating  93% of US teens use the internet  64% online US teens age 12-17 participate in content-creation activities  Content creation: it’s not just about the created objects. Discussion and social interaction are key.  Teens often work together to create content  Some teens are multi-channel “super communicators,” using multiple communications tools on a daily basis From the Pew Internet and American Life Project: report on Teens and Social Media (December 2007).

Slide 14: 5 Gen Y consumers: Mary buys a prom dress • Researched dresses online • Visited store with friends and digital cameras, trying on dresses and taking photos • Selected the dress • Uploaded photos to • Searched for and Facebook and asked purchased dress online additional friends to • Used savings to purchase comment accessories Example from the blog of the Digital Youth Research Project.

Slide 15: 5 Gen Y “Gamer Generation” goes to work The stereotype The reality 92% of kids age 2-17 have regular access to video/computer games. Gaming develops skills that are highly applicable to knowledge work. Gaming is highly social for Gen Y and part of their collective experience. Gaming experience shapes their attitudes, expectations and beliefs about how the world and the workplace operate. From The Kids Are Alright: How the Gamer Generation is Changing the Workplace by John Beck and Mitchell Wade.

Slide 16: 6 Increasing impact of technologies As technology continues to advance, new models for how, where, and when work gets done open up new possibilities.  Explosive growth in broadband  Cellular phones are commonplace  Virtual private networks (VPNs) enable secure access to corporate applications from outside the office  Virtual workplaces are being designed and adopted Copyright © 2007 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 17: 6 Experts’ vision of the internet in 2020 • Global, low-cost network available to (almost) everyone • Free flow of information will blur national boundaries and other traditional groups • Rise of region-states, “corporation-based cultural groupings” and “reconfigured human organizations tied together by global networks” • Humans will remain in control of the technology • No independent autonomous intelligent agents - yet • Sophisticated, compelling virtual worlds • Greater transparency and less privacy, with a mix of positive and negative consequences • English will remain common online but Mandarin (and possibly other languages) will have significant presence • Some people will choose to be technological refuseniks From the Pew Internet and American Life Project – Future of the Internet II report (September 2006).

Slide 18: 6 Mobile technologies are transforming work and life Laptops are increasingly the assumed standard for personal computers. Many companies say that out-of-office work is “nothing special – just part of how we do business now.” Urban nomads:  People connected anywhere, anyplace  Not just for business travelers, but for people going about their daily lives in their local environment  A single smart device (cellphone+internet) taking the place of multiple pieces of equipment  Assumption that you can access your personal files from any device Quote from The Telework Coalition’s Teleworking Benchmarking Study Best Practices for Large- Scale Implementation in Private and Public Sector Organizations – Executive Summary (2006). “Urban nomads” from The Economist - Mobile Edition (April 10, 2008).

Slide 19: These six trends are converging -- causing an increasing disconnect with traditional work patterns Increasing number of women Changing family in paid work structures Changing expectations Shrinking pool of of men skilled labor Evolving expectations of Increasing impact Gen X and Gen Y of technology Copyright © 2008 Deloitte Development LLC. All rights reserved. Used with permission. From Deloitte research into workforce trends related to the Mass Career Customization initiative.

Slide 20: (Some) Business leaders are responding… Business challenges on the radar of future-focused C-level executives:  Shifts in employee skills and expectations – attracting and retaining employees  Shifts in customer skills and expectations -- attracting and retaining customers  Shifts in skills and styles for leadership – developing leaders and managers for this new workforce  Shifts in technologies -- impacting both the marketplace and the workplace

Slide 21: …but it won’t happen overnight. “Never mistake a clear view for a short distance.” Folk saying, in current times attributed to Paul Saffo

Slide 22: And key pieces of the solution still need to be developed….which is where you come in. Our Business PARC works closely with other organizations – from leading global corporations and government agencies to newly formed ventures – to discover breakthrough concepts that deliver value and solve real needs. By aligning our expertise with their strategic interests, our clients can:  strengthen innovation effectiveness;  extend scientific and technical capabilities;  anticipate and respond more quickly to emerging industry trends;  cultivate new market opportunities or business models; and  acquire intellectual property while maximizing existing assets.

Slide 23: Tomorrow’s Knowledge Workers: The Evolving Workforce and the Challenge to US Businesses PARC Futures Workshop Ken Parekh and Mary Walker, Consultants Currently with the Deloitte Mass Career Customization Initiative April 30, 2008